UPDATE 2-Brazil's president loses support but on track to win re-election

RIO DE JANEIRO, March 27 (Reuters) - Popular support for
Brazilian President Dilma Rousseff has faltered ahead of the
Oct. 5 presidential election, a poll showed Thursday, but the
leftist leader remains favored to win a second term.

Hurt by a sluggish economy, high inflation and a scandal
surrounding Brazil's state-run oil company, Rousseff's personal
approval rating has dropped to 51 percent from 56 percent in
November, the survey by the Ibope polling institute and Brazil's
National Industry Confederation showed.

Support for her administration fell to 36 percent from 43
percent in the previous poll, while 27 percent of those polled
disapproved of the government, compared with 20 percent in
November. The latest poll was taken from March 14-17 and has a
margin of error of 2 percentage points.

The drop in support, which led to a sharp rally in Brazilian
stocks and boosted the country's currency on Thursday, reflects
the challenges that Rousseff must overcome to win re-election.

"It shows that 2014 is going to be a hard year for the
government," said Rafael Cortez, a political analyst with
Tendencias, a consultancy in São Paulo. "All these negative
issues are hurting her image as a candidate."

Although Rousseff and her ruling Workers' Party still enjoy
widespread support because of economic gains made during the
administration of former President Luiz Inácio Lula da Silva,
her mentor and predecessor, Rousseff is currently presiding over
the fourth year of lackluster growth in Latin America's largest
economy.

Price increases and a lack of investment in the country's
public services led to mass nationwide demonstrations last year
that have caused many voters to question the Workers' Party's
12-year grip on the presidency.
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